Company Achieves Positive EBITDA Results On 49 Percent Increase In Sales MINNEAPOLIS, May 12
MINNEAPOLIS, May 12 /PRNewswire-FirstCall/ -- XATA Corporation
(Nasdaq: XATA), today reported a $3.9 million or 49 percent increase in sales
for the second quarter ended March 31, 2008 as sales increased to $12.1
million from $8.2 million for the same period in fiscal 2007. The revenue
increase in the quarter was driven by a 45 percent growth from the company's
XATANET subscription revenue and two months of sales relating to the
acquisition of GeoLogic Solutions, Inc. Comparable second quarter year-over-
year sales, excluding the GeoLogic Solutions sales, grew at 9 percent as the
company's legacy OpCenter product sales continue to decline consistent with
expectations as new and existing customers launch or migrate to XATANET
systems.
For the second quarter recurring revenue, including monthly subscriptions
from XATANET and monthly fees from our MobileMax and OpCenter product lines,
accounted for 48 percent of total sales compared to 32 percent for the same
period in fiscal 2007.
Operationally, total gross margins increased to 50 percent for the second
quarter of fiscal 2008 compared to 43 percent for the same period of fiscal
2007. The increase was driven by higher gross margin XATANET subscription
revenue and the fact that a larger portion of the total revenue stream now
consists of higher recurring revenue gross margins.
Selling, general and administrative costs were $5.8 million and $3.4
million for the second quarter of fiscal 2008 and 2007, respectively. The
increase of $2.4 million reflects the selling, general and administrative
costs of the consolidated operations, including amortization expense of $0.3
million relating to the acquired intangible assets.
For the second quarter of fiscal 2008, the company generated a positive
EBITDA (earnings before interest (net), taxes, depreciation, amortization,
stock based compensation and preferred stock dividends and deemed dividends)
of $0.01 per diluted share compared to a loss of $0.01 per diluted share for
the same period of fiscal 2007.
"We are very pleased with our second quarter financial performance.
XATANET subscription sales continue to grow as existing clients migrate from
our legacy OpCenter product and new subscribers, such as SYSCO, realize the
benefits of our software solution to their businesses," said Jay Coughlan,
XATA chairman and CEO. "With the acquisition of GeoLogic, we now have
approximately 59,000 recurring revenue systems and a footprint into the for-
hire segment of the trucking industry, which according to FleetSeek database
includes approximately 1.5 million vehicles."
The company's second quarter performance also includes an increase in
interest expense of $0.4 million as the result of $18.2 million in debt that
was incurred to fund the Geologic acquisition. As a result, the company
reported a net loss to common shareholders for the quarter of $1.4 million, or
$0.17 per diluted share, compared to a net loss of $0.9 million, or $0.12 per
diluted share, in the comparable period of fiscal 2007.
Six Month Performance
Sales for the six months ended March 31, 2008 increased 24 percent to
$19.8 million versus $16.0 million for the same period one year ago. The
revenue increase was driven by a year-over-year 45 percent growth from the
company's XATANET subscription revenue and two months of sales relating to the
acquisition of GeoLogic Solutions, Inc. Comparable year-over-year sales for
the six month period, excluding the GeoLogic Solutions sales, grew at 4
percent as the company's legacy OpCenter product sales continue to decline
consistent with expectations as new and existing customers launch or migrate
to XATANET systems. For the six-month period, recurring revenue contributed 45
percent of total sales for fiscal 2008 compared to 31 percent for fiscal 2007.
"We continue to successfully integrate the GeoLogic acquisition into our
organization," Coughlan said. "This acquisition has moved XATA into the 1.5
million for-hire truck segment of the trucking industry, a significant growth
opportunity for us as we expand our software technology offerings and services
into the marketplace."
Gross margin improved during the six month period of fiscal 2008 to 49
percent in comparison to 44 percent for the same period in fiscal 2007 due to
an increase in higher gross margin XATANET subscription revenue and the fact
that a larger portion of the total revenue stream now consists of higher
recurring revenue gross margins.
Selling, general and administrative costs were $9.5 million and $6.5
million for the six months ended March 31, 2008 and 2007, respectively. The
increase is driven by additional costs of the combined entity and investments
in our brand strategy, professional services business and direct sales model.
As a result of the increased operating expenses being partially offset by
improved margins, the company reported an EBITDA loss for the six months ended
March 31, 2008 of $0.05 per diluted share compared to a loss of $0.02 per
diluted share for the same period of fiscal 2007 and a net loss to common
shareholders of $2.5 million, or $0.30 per diluted share, versus a net loss to
common shareholders of $1.6 million, or $0.20 per diluted share, for the same
six month period in 2007.
Non-GAAP vs. GAAP Financials
To supplement the company's consolidated financial statements presented in
accordance with GAAP, the company provides certain non-GAAP measures of
financial performance. These non-GAAP measures include EBITDA, which is
earnings before interest (net), taxes, depreciation, amortization, stock based
compensation and preferred stock dividends and deemed dividends, and EBITDA
per diluted share. The company's reference to these non-GAAP measures should
be considered in addition to results prepared under current accounting
standards, but are not a substitute for, or superior to, GAAP results.
These non-GAAP measures are provided to enhance investors' overall
understanding of the company's current financial performance and ability to
generate cash flow. In many cases non -GAAP financial measures are used by
analysts and investors to evaluate the company's performance. Reconciliation
to the nearest GAAP measure of all non-GAAP measures included in this press
release can be found in a financial table included below in this press
release.
About XATA
Based in Minneapolis, MN, XATA Corporation (NASDAQ: XATA) is an expert in
optimizing fleet operations by reducing costs and ensuring regulatory
compliance for the trucking industry. With the introduction of XATANET in
2004, our customers now have access to vehicle data anywhere, anytime, through
a fee-based subscription service. Our software and professional services help
companies manage fleet operations, enhance driver safety and deliver a higher
level of customer satisfaction. XATA provides expert services to develop the
business processes required to deliver the profitability, safety and service
level demanded by today's competitive transportation environments. XATA was
the first company to introduce electronic driver logs and exception-based
management reporting. For more information, visit http://www.xata.com or call
1-800-745-9282.
Cautionary note regarding forward-looking statements.
This announcement includes forward-looking statements. Statements that
are not historical or current facts, including statements about beliefs and
expectations, are forward-looking statements. Such statements are based on
current expectations, and actual results may differ materially. The forward-
looking statements in this announcement are subject to a number of risks and
uncertainties including, but not limited to, the possibility of continuing
operating losses, the ability to adapt to rapid technological change, cost and
difficulties we may face in integrating the businesses of XATA and GeoLogic
Solutions, dependence on positioning systems and communication networks owned
and controlled by others, the receipt and fulfillment of new orders for
current products, the timely introduction and market acceptance of new
products, the ability to fund future research and development activities, the
ability to establish and maintain strategic partner relationships, and the
other factors discussed under "Risk Factors" in Part IA, Item 1 of our Annual
Report on Form 10-K for the fiscal year ended September 30, 2007 (as updated
in our subsequent reports filed with the SEC). These reports are available
under the "Investors" section of our Web site at http://www.xata.com and
through the SEC Web site at http://www.sec.gov. Forward-looking statements
speak only as of the date they are made, and we undertake no obligation to
update them in light of new information or future events.
XATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(Unaudited)
Three Months Six Months
Ended Ended
March 31, March 31,
2008 2007 2008 2007
Sales$12,129$8,162 $19,816 $15,936
Cost of sales 6,009 4,670 10,067 8,851
Selling, general and administrative5,759 3,4389,475 6,495
Research and development 1,439 1,0242,479 2,198
Total costs and expenses 13,207 9,132 22,02117,544
Operating loss(1,078) (970) (2,205) (1,608)
Interest income 110 101 241 192
Interest expense(370) (6)(387) (13)
Loss before income taxes (1,338) (875) (2,351) (1,429)
Income tax expense - -- -
Net loss (1,338) (875) (2,351) (1,429)
Preferred stock dividends
and deemed dividends (47) (46)(137) (187)
Net loss to common shareholders $(1,385)$(921) $(2,488) $(1,616)
Net loss per common share - basic and
diluted $(0.17) $(0.12) $(0.30) $(0.20)
Weighted average common and common
share equivalents basic and diluted 8,306 7,9218,234 7,883
XATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
March 31,September 30,
2008 2007
(Unaudited)
Current assets
Cash and cash equivalents$8,036 $13,675
Accounts receivable, net 9,196 3,280
Inventories 3,876 2,672
Deferred product costs1,098 752
Current portion of investment in sales-
type leases955 -
Prepaid expenses 1,596 393
Total current assets 24,757 20,772
Equipment and leasehold improvements, net 4,070 1,583
Goodwill and intangible assets 14,675 -
Deferred product costs, net of current portion 1,936 1,798
Other non-current assets1,435 -
Total assets $46,873 $24,153
Current liabilities
Current portion of long-term
obligations and deferred rent $2,237$161
Accounts payable 5,194 3,419
Accrued liabilities 4,821 3,548
Deferred revenue 4,382 3,105
Total current liabilities 16,634 10,233
Note and capital lease obligations,
non-current 16,387 220
Deferred rent 854 98
Deferred revenue, non-current 6,502 6,524
Total liabilities 40,377 17,075
Shareholders' equity
Common stock 27,614 25,845
Preferred stock 15,840 15,703
Accumulated deficit (36,958)(34,470)
Total shareholders' equity 6,496 7,078
Total liabilities and shareholders'
equity $46,873 $24,153
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
2008 20072008 2007
Net loss to common
shareholders $(1,385) $(921) $(2,488) $(1,616)
Adjustments:
Net interest expense 260 (95) 146 (179)
Stock-based compensation 501 526 883 927
Depreciation and
amortization expense632 333 882 491
Preferred stock
dividends and deemed
dividends47 46 137 187
Total adjustments1,440 8102,0481,426
Non-GAAP EBITDA$55$(111) $(440) $(190)
Non-GAAP EBITDA per
diluted share $0.01 $(0.01) $(0.05) $(0.02)
Shares used in calculating
non-GAAP EBITDA
per diluted share 8,3067,9218,2347,883
SOURCE XATA Corporation
